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Live Nation Entertainment Inc (NYSE:LYV) shares are tumbling Thursday after the U.S. Department of Justice filed a lawsuit against the company.
What To Know: Live Nation shares traded down in early trading on reports suggesting the DOJ and a group of states including California, Florida, Texas, among others, were preparing to file an antitrust lawsuit against the entertainment giant. The lawsuit has now officially been filed.
In a statement issued Thursday morning, Live Nation characterized the lawsuit as an attempt to portray Live Nation and Ticketmaster as the cause of fan frustration with the live entertainment industry.
“It blames concert promoters and ticketing companies — neither of which control ticket prices — for high ticket prices. It ignores everything that is actually responsible for higher ticket prices … It blames Live Nation and Ticketmaster for high service charges, but ignores that Ticketmaster retains only a modest portion of those fees,” the company said in the statement.
Live Nation argued that the real drivers of higher ticket prices include increasing production costs, surging artist popularity and ticket scalping, which shows a willingness to pay more than primary ticket prices.
The company also said it’s “absurd” to claim that Live Nation and Ticketmaster represent a monopoly because the primary feature of monopolistic power is profits derived from monopoly pricing and the company “in no way fits the profile.”
Live Nation suggested that the lawsuit is more of a political move, noting that in recent discussion with the DOJ front office, officials “did not want to believe” the numbers as the data conflicted too much with their preconception that Live Nation operates a monopoly.
“It is also clear that we are another casualty of this Administration's decision to turn over antitrust enforcement to a populist urge that simply rejects how antitrust law works. Some call this "Anti-Monopoly", but in reality it is just anti-business,” Live Nation said.
LYV Price Action: Live Nation shares were down 6.05% at $95.28 at the time of publication on Thursday, according to Benzinga Pro.
Photo: Shutterstock.
Posted In: LYV
